Should Result in Greater Operational and Financial Flexibility Foster Wheeler, a major international engineering company, has announced it intends to move its headquarters to Bermuda.

The company, which provides engineering services and products to a broad range of industries, including the petroleum and gas, petrochemical, pharmaceutical, and power-generation industries, said Bermuda's financial climate has attracted the board of directors of the Clinton, N.J. company as it tries to gain operational flexibility.

The final decision still is subject to approval by two thirds of the company's stockholders at its annual meeting in April 2001.

"This change is another strategic initiative we are taking to strengthen the company's balance sheet and its business in the long term," said Richard J.

Swift, Foster Wheeler's chairman, president and chief executive officer.

"The majority of our revenues and income is derived from outside the United States, and we believe that the business, regulatory and tax environment in Bermuda should enable us to create more value for our stockholders.

"Our change in legal domicile will allow Foster Wheeler to compete more effectively worldwide because it should result in greater operational flexibility and better position us to manage international cash flows and our complex worldwide tax arrangements,'' Mr. Swift added.

According to the company's chief financial officer, Gilles Renaud the reconfiguration of the company will not only allow greater operational flexibility but will also improve the company's worldwide cash management.

The Chief Financial Officer also held that the move may provide a more favourable corporate structure for the expansion of Foster Wheeler's current business and future strategic alliances and acquisitions.

He explained that the financial flexibility gained through the Bermuda relocation may have a favourable effect on the company's ability to access international capital markets. He added that this in turn would result in greater flexibility in the long term to manage worldwide tax liabilities, which should stabilise the company's global effective tax rate.

Foster Wheeler eyes new Bermuda home "We expect this transition to be seamless and transparent for our employees, vendors and customers around the world,'' said Mr. Renaud.

"Corporate operations will continue to be managed from our current headquarters in Clinton, New Jersey, and we remain fully committed to our employees and local communities everywhere we currently do business,'' Swift added.

The plan approved by the board calls for the creation of a new Bermuda-based holding company to be called Foster Wheeler Ltd.

Shareholders of Foster Wheeler Corporation will receive a number of shares in Foster Wheeler Ltd. equal to the number of shares they hold in Foster Wheeler Corporation. These shares will have substantially the same attributes as Foster Wheeler Corporation common shares and are expected to be listed on the New York Stock Exchange under the symbol FWC.

The proxy, which will be issued in March 2001, will give details of the transaction. This reconfiguration is subject to stockholder approval at Foster Wheeler's Annual Meeting of Stockholders on April 23, 2001.

Foster Wheeler provides services including design, engineering, construction, procurement, and financing, as well as project management, research, plant operation, and environmental services. Products include fired heaters, steam generating units as well as auxiliary equipment.